Category: Labor and Employment Law

The End of the Labor Reform Act of 2017?

During the 2020 election campaign in Puerto Rico, several candidates ran on a platform that included amending the Labor Reform Act of 2017, Law No. 4 of January 26, 2017 (“Law No. 4-2017”). Accordingly, it should come to no surprise that in the opening 2021 legislation session, there is a flurry of bills in the House intended to amend or repeal Law No. 4-2017. This legislative action is coupled with other amendments to labor laws rejected in the past that could find more friendly supporters within the new composition of both houses of the Puerto Rico legislature. Following is a list of labor and employment related bills that have been filed in the House (PC) and the Senate (PS):

PC-3: To repeal the Labor Reform Act of 2017. This bill would reinstate employee rights such as a shorter probationary period, the presumption of wrongful termination, and the indemnity under Law No. 80 of May 30, 1976 (Wrongful discharge); the previous vacation accrual rate contained in Law No. 180 of July of July 27, 1998 (Minimum wage, vacation, and sick leave); and other rights under Law No. 379 of May 15, 1948 (Working days and hours), Law No. 148 of June 30, 1969 (Christmas bonus) and others prior to the amendments of Law No. 4-2017.

PC-62: To prohibit salary deductions for victims and employees summoned as witnesses and to provide a leave without pay and reinstatement if more time if needed by the authorities to complete the judicial proceedings.

PC-86: To amend Article 1 Law No. 80 of May 30, 1976 (Wrongful discharge) and provide as a remedy the reinstatement of the employee, with the same employment conditions before the termination.

PC-100: To provide a special cultural leave for employees of both the public and private sectors who represent Puerto Rico in international cultural events. Eligible employees, as certified by the Puerto Rico Institute of Culture and the Puerto Rico State Department, would include artists, writers, specialized cultural personnel, and cultural promoters.

PC-109: To amend Article 5-A of Law No. 45 of April 18, 1935, Puerto Rico’s Workers Accident Compensation Act (“El Fondo”) and extend the job reservation period of 12 months to 24 months in cases of serious job-related accidents, and for other purposes.

PC-110: To provide for a one-time, 5% discount, of the El Fondo premiums for employers who do not report work related accidents in the previous 2 years.

PC-112: To introduce numerous amendments to Law No.4-2017 and reinstate and extend rights for the working class. This bill is analogous to Senate Bill 91, a 41-page comprehensive piece of legislation, which basically repeals Law No. 4-2017.

PC-118: To provide all employees with the right to “digital disconnection” of employment related electronic communications, after working hours.

PC-148: To provide at least a 30-day notice to the Puerto Rico Department of Labor, the Department of Economic Development, and all potentially affected employees, of closing decisions and consolidations of operations, to mitigate the impact of these decisions.

PC-152: To amend Law No. 42 of July 9, 2017, Puerto Rico’s Act to Manage the Study, Development, and Investigation of Cannabis for Innovation, Applicable Norms and Limitations, and provide employment protection to employees treated with medical cannabis.

PC-161: To amend Puerto Rico’s Judiciary Act of 2003 and provide for the establishment of specialized Labor and Employment Courts at the Court of First Instance, as part of a 3-year pilot program, with appropriate funding, and to establish the scope of such specialized Courts.

PC-204: To provide educational support for children of employees who died while responding and working during the COVID-19 pandemic.

PC 218: To amend the Puerto Rico Penal Code and require IT programmers, technicians, and service providers to report to the Puerto Rico Police child pornography material in the computers they service.

PC-242: To amend the Internal Revenue Code for a New Puerto Rico and provide income tax relief to the salaries of employees and to the compensation of service providers who participate in the response or recovery operations resulting from emergency declarations issued by the Puerto Rico governor, and to identify which persons are eligible for such tax relief.

PS-96: To amend Article 6 of Law No. 180-1998 and provide the use of up to 4 hours of accrued and unused sick leave to donate blood.

It is perhaps too early to know how many of these initiatives will survive the legislative and political process. But one thing is clear. We will witness some amendments to the labor reform act of 2017 if one of its main purposes, to create a more attractive investment and job creation environment, is hard to prove.

AMG will monitor the progress made in the above-mentioned bills and will issue additional newsletters and alerts as needed.

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